Greece goes the distance, continuing to win investors’ trust

The attractiveness of Greece as an investment destination continues to strengthen.

The EY Attractiveness Survey Greece 2023 shows foreign direct investment (FDI) projects in Greece grew by 57% in 2022, at a time when investment in Europe increased by a mere 1%. The improvement in the qualitative composition of investments, is continuing, with a marked shift toward knowledge-based activities with relatively high added value. Investors’ perception of the country’s attractiveness remains positive with several key indicators further improving. Forty percent of respondents say they intend to invest or expand their operations in the country; the highest figure since the launch of the survey in 2019, now in its fifth year.            

Greece achieved its best FDI performance since 2000

For the second consecutive year, FDI in Europe has continued to recover at modest rates, following a 13% decrease during the COVID-19 pandemic in 2020. The number of FDI in Europe increased by 5% in 2021 and a mere 1% in 2022.

According to data from the European Investment Monitor (EIM), Greece attracted 47 FDI projects in 2022, marking a 57% increase compared to 2021.

This is one of the highest growth rates recorded in Europe for the year, positioning Greece in the 19th place among European countries for 2022. It amounts to Greece's strongest performance since 2000, when the European report was launched. This trend confirms the upward trajectory observed in recent years. The number of FDI projects recorded for Greece over the last three years, accounted for one-third (35%) of the total investments in the period from 2000 to 2022.

Greece's share of total FDI projects in Europe stands at 0.79%. It is clear that, in order for Greece to secure its rightful place on the European investment map and cover the investment gap of the past two decades, the current growth rate needs to be maintained and even intensified for many more years.

The report also reveals a continuous improvement in the qualitative composition of investments, with greater diversification into a wider range of activities. A significant share of investments is now directed toward knowledge-based activities with relatively high-added value, such as software and information technology services, which can play a significant role in transforming the country's productive model.

Appetite for investments in Greece continues to rise

According to the survey, conducted by FT Longitude, the specialist research and content marketing division of the Financial Times Group, between 3 July and 26 July 2023, with the participation of 250 executives from foreign companies worldwide, two out of five companies (40%) plan to establish or expand their operations in Greece over the next year. This percentage has steadily increased over the past three years, from 28% in 2020 to 34% in 2021 and 37% in 2022.

As with the rest of Europe, the most significant economic risks that have impacted plans to invest in Greece were inflation and its impact on consumer demand (50%), as well as the rising interest rates and tightening financial conditions (43%).

When asked about the sectors where they expect to increase their current investment footprint over the next three years, companies already established in the country selected business services (61%) and logistics (58%) as their top two choices. In contrast, only one in three companies intends to increase its footprint in Greece in the critical area of research and development (R&D - 33%), compared to 64% for the whole of Europe, while 25% stated they expect to reduce it.

Regarding the most significant risks that could threaten Greece's overall attractiveness as an investment destination, survey participants mentioned increasing inflation (28%), the energy crisis (23%), social and economic instability (21%), and cost of labor (20%).

Three out of five respodents have seen an improvement in the country's attractiveness in the past year ...

According to the survey, 60% of respondents state that their perception of Greece as a location where their company might establish or develop activities has improved over the last year, with 8% stating that it has significantly improved. The overall percentage of those reporting improvement has increased compared to 2022 (58%) and is the highest since the launch of the survey, with the exception of 2021, when it had reached 62%.

... while optimism remains high for the improvement of the country's attractiveness in the next three years

Two out of three participants (67%) believe that Greece's attractiveness will further improve over the next three years, with 5% anticipating significant improvement, while 9% of respondents expect a slight decline, and 2% a significant decline. This outlook is in line with that for the whole of Europe (67% expecting improvement and 8% expecting a deterioration).

Greece’s attractiveness policy seen as effective, with room for further improvement

Three out of four respondents (76%) consider the country's policies for attracting investors to be "very" (16%) or "somewhat" (60%) effective. However, the high percentage of respondents describing Greece's attractiveness policies as "somewhat" effective, suggests that there is room for further improvement.

Among specific attractiveness policies, companies appear more impressed by policies for attracting companies (76%), innovative activities (68%), and human talent (64%), followed by policies to attract business headquarters (58%) and establishing global centers for competitiveness/world-class clusters (54%).

Sustainability, technology, and talent

Participants were also asked to assess Greece’s performance compared to other countries, based on a series of criteria related to three critical factors influencing investment decisions today: sustainability, technology, and talent.

In all these areas, the majority of respondents stated that Greece is performing as well as other countries. The most positive perception for the country emerges with regard to sustainability, where, for five out of six individual criteria, those that feel that Greece is performing better than other countries outnumber those stating the opposite. However, with regard to criteria related to technology and talent, the picture that emerges is more mixed, with participants almost equally split between those who say that the country is performing better and those who say it is performing worse than other countries, indicating some key areas where further progress will be needed in the coming years.

Positive views on the management of the energy crisis

Greece outperformed others in handling the 2022 energy crisis, according to respondents. Two out of five respondents expressed positive opinions, with 36% stating that Greece managed the crisis "slightly better" and 7% "significantly better" than other countries, while 22% believed that the management of the crisis was comparatively worse.

Human skills, taxation, high technology, and innovation remain top priorities

Regarding the areas the country should focus on to maintain its competitive position in the global economy, respondents continue to prioritize three key areas: developing education and skills (31%), reducing taxation (28%), and supporting high-tech industries and innovation, such as cleantech (26%).

If interested in the Greek survey, please click here.

Download the English Version here.